Supplementary Information on the Financial …...FY2/16 1Q Financial Highlights 2 Sales and earnings...

Supplementary Information on the Financial Results

for the Three Months Ended May 31, 2015

©2015 Aeon Delight All Rights Reserved

July 8, 2015

FY2/16 1Q Financial Highlights

2

■ Sales and earnings increased and achieved the highest income backed by increasing needs for FM

services (Net sales 70.5 billion yen, 106.1% YoY / Operating income 3.6 billion yen, 102.4% YoY)

■ Acquired new customers outside the AEON group including 21 medical-related facilities etc.

(doubled the number of hospital bed YoY)

■ To further bolster competitive advantages in the hygiene control segment, implemented measure to

make cleaning quality more visible. In the energy solutions segment, measures are going forward to

bring in and develop remote control systems using IoT.

■ For overseas business, expand customer base by providing services to 155 facilities in China,

122 facilities in Malaysia and 171 facilities in Vietnam mainly for individual orders

Changes in the business environment

Financial summary

■ Among major medical institutions, universities and some major manufacturers,

there are increasing trends toward revamp of installation management from the standpoints of quality

and cost, and greater demand for comprehensive facility management (FM) services.

■ Employee supply-demand is tightening, and for definite acceptance of new inquiry properties,

securing human resources and reinforcement of education and training systems are matters of urgency.

■ For FM services, demand continues to be exceeding the supply in China and ASEAN countries


FY2/15 1Q Financial Summary

FY2/16 1Q FY2/15 1Q

Amount Pct. to net

sales (%) YoY (%)

Amount

(actual)

Pct. to net

sales (%)

Net sales 705 100.0 106.1 664 100.0

Operating

income 36 5.1 102.4 35 5.3

Ordinary

income 36 5.2 102.6 35 5.4

Net income 20 2.9 103.1 20 3.0

3

Sales and earnings increased and were all-time highs due to steady increase of orders for

large facilities and business growth of subsidiaries including overseas subsidiaries.


100 million yen

Net Sales by Segment

Net sales of each six businesses increased YoY. Double increase in construction work business

and support business. Vending machine business implemented the measures for provision of

new value, while the sales volume in the whole industry is decreasing.

FY2/16 1Q actual FY2/15 1Q actual

Net sales Composition

ratio (%) YoY (%) Net sales

Composition

ratio (%)

Facilities management 121 17.2 107.8 112 16.9

Cleaning services 116 16.5 106.5 109 16.5

Security services 93 13.2 104.2 89 13.4

Construction work 130 18.5 110.1 118 17.8

Materials/supplies

sourcing services 120 17.1 103.1 117 17.6

Vending machine services 81 11.5 97.3 83 12.5

Support services 42 6.0 121.6 34 5.2

4 ©2015 Aeon Delight All Rights Reserved

100 million yen

Initiatives Results by Segment

Facilities

management

Cleaning services

In addition to new consignments, those for Freon control agency work under the "Law Related to Freon Control" expanded in and after April. Energy management system development is going forward.

Orders from both new and existing customers are increased. Continued to promote the initiatives for profitability improvement by reducing procurement and distribution costs with using electronic negotiation systems

While the YoY sales volume in the whole industry is decreasing, established new division specialized in customer cultivation. Developed and expanded the sales of private brand beverages for bending machine. Advertised digital signage vending machines.

Increased shares in the hospital nursing market by providing the unique hygiene control services for medical-related facilities. Implemented the continuous quality improvement of cleaning services

Contracts for permanent and temporary security at newly opened facilities expanded, as

did attendee welcoming services within facility security. 35 shops have brought in the

latter.

To increase customer drawing power, promoted proposals to corporations looking to invest in commercial facilities. Contracts are expanding well, centering on invigoration of existing shops and on maintenance and repair construction

Expanded sales of housework services “KAJICloud” by KAJITAKU Co., Ltd.

(Up 148.2% YoY) Expansion of living support services contributed to the sales growth.

Security services

Construction work

Materials/supplies

sourcing services

Vending machine

services

Support services


Consolidated Balance Sheet： FY2/16 1Q

100 million yen

February 28,

2015

End of FY2/15

May 31, 2015 1Q

Difference

February 28,

2015

End of FY2/15

May 31, 2015

1Q Difference

Current

assets 1,044 1,047 2

Current

liabilities 466 462 △4

Fixed

assets 215 216 0 Fixed


Tangible fixed

assets 43 44 0 Total


Intangible fixed

assets 109 108 △0

Total net assets 774 783 8

Investments,

etc 62 63 0

Total assets 1,260 1,263 3 Total liabilities and

net assets 1,260 1,263 3


Consolidated Cash Flow Statement： FY2/16 1Q

FY2/2015

1Q

FY2/2016

1Q Change

Cash flows from operating activities 29 △17 △47

Cash flows from investing activities 11 26 14

Cash flows from financing activities △12 △13 △0

Cash and cash equivalents at the

end of year 148 149 0

Major factors for increase/decrease(100 million yen)

【 Operating cash flows 】 △17

Income before income taxes 36

Decrease (increase) in accounts receivable △37

Increase (decrease) in accounts payable 26

Decrease (increase) in consumption tax payable △11

【 Investing cash flows 】 26

Increase (decrease) in

deposit of subsidiaries and affiliates for

consumption

34

【Financing cash flows】 △13

Dividend payment △13

©2015 Aeon Delight All Rights Reserved 7

100 million yen

FY2/2015 1Q FY2/2016 1Q

Quarterly Net Sales for the Past Three Years

Quarterly net sales

Total quarterly net sales

100 million yen

100 million yen


Quarterly Operating Income for the Past Three Years

Quarterly operating income

Total quarterly operating income

100 million yen

100 million yen

9

80

170


10

・ Make cleaning quality more visible. Building evaluation standards for infection control at

medical facilities

・ Implement on-site quality improvement continuously

・ Challenge for innovation in the cleaning industry： Develop cleaning robots

・Introduce and operate unique telecontrol system capable realizing energy

and cost saving through comprehensive management of various equipments

introducing IoT (Internet of Things)

Hygiene control

Energy solution

Initiatives from 2Q Onward：Strengthen Competitive Advantages

・ Strengthen recruiting activity for securing human resources.

Established “Education Division” (as of June 1) to enhance the development and training

system as a source of competitiveness

Recruit more people,

strengthen education

and training system

・ Established “Quality Assurance Division” (as of June 1) to maintain and

improve service quality and prepare for introducing IOS to FM Improve the service quality

■ Strengthen business competitiveness

■ Enhance the organizational framework

China ：Enhance the local management structure . In Jiangsu, aim to expand customers outside

the AEON group driven by offering services to increasing AEON stores.

Malaysia： Accelerate the efforts to further increase contracts by AEON group. To meet the needs

for energy saving, promote the facility management-integrated energy saving services

Vietnam：Expand the business area by establishing new office (Hanoi office)

Asia


(Reference)Initiatives for FY2/16

Copyright ©2014 AEON DELIGHT CO., LTD. All Rights Reserved. 15

Positioning of FY2/16


“Favorable conditions and great opportunities”-- Following wind for AEON delight in a management environment

FY2/16 is year to decide the match: Capture market share in Japan and Asia

(1) Inflationary trends will change the management

environment. Though pressure will come from cost increases

and hiring difficulties, there are opportunities in our competitive

environment. Oligopolization in the market will enhance.

(2) At large facilities, tendencies toward bundled entrusting of

facility management services are notable, increasing switching

of outsourcers (many inquiries from hospitals, universities,

large corporations)

(3) Greater consciousness of emergency responses and

safety in abnormal weather and natural disasters

(4) Retail industry is experiencing a difficult struggle since last

year's consumption tax rate hike. Increase in investment

interest at commercial facilities.

(5) Full scale invasion of the industry by foreign major

companies and companies in other industries is nearing.

Competition will soon be characterized by facility management

by international standard specifications and by reform-driven

innovation.

≪Perceptions of the domestic management environment≫ ≪Perceptions of the management environment in China≫

(1) Real estate market shifts point to waning condominium

demand, particularly in the major cities. The priority trend is away

from expansion and toward quality. In commercial facilities, energy

conservation is inevitable.

(2) Business areas will be expanded centering on companies that

join our Group by means of joint venture strategies. We are

searching for new energy conservation partners. The pace of

China's commercialization is extremely high.

≪Perceptions of the ASEAN management environment≫

(1) The stages of FM business development vary by country.

Singapore and Malaysia are advanced countries in FM operations,

and foreign companies in Europe and the U.S. have made

advances there, but no company is overwhelmingly prominent.

(2) The business is undeveloped, and it is necessary to build an

industry top class business foundation before a competitive

landscape is fixed up.

FY2/16 Priority Measures

① Expand customers outside the AEON Group

② Establish competitive advantages

③ Expand the business in Asia

① Supplement the new sales force ② M&A (facilities management subsidiaries of major companies)

③ Focus on capture of hospital nursing facilities ④ Reinforce the sales of patrol centers

⑤ Develop continuous sales ⑥ Expand the route of customer introductions from consulting companies

① Secure labor power and cooperating companies

② Added value creation, innovation

Hygiene control business ：Develop cleaning robots and put it into practical use

Energy solution business：R&D of next-generation facility management

① China：Expand the business area, reorganization, create product models for energy conservation

packages by means of alliances

② Malaysia：Cultivate customers with ESCO business. Promote to change the outsourcing contractor of

facilities, operated by AEON group, to AEON delight. Increase contracts outside the AEON group.

③ Vietnam：M&A, Accelerate the growth by means of alliances, Establish Honoi Office


Business Forecast for FY2/16

Full-year forecast for FY2/16 FY2/15 actual

Amount

Pct. to

net sales

(%)

YoY (%) Amount

(Actual)

Pct. to

net sales

(%)

Net sales 2,800 100.0 105.0 2,667 100.0

Operating

income 170 6.1 107.2 158 5.9

Ordinary

income 170 6.1 106.6 159 6.0

Net income 94 3.4 107.7 87 3.3


(100 million yen)

Copyright ©2014 AEON DELIGHT CO., LTD. All Rights Reserved.

Measures for Operating Income Expansion


FY2/16 Operating income ¥１７billion YoY +¥1.2billion

Measure 1：Expand customers

outside the AEON Group

YoY change （billion） Measures

¥1-1.5 billion

Measure 2：Improve profitability of each business ¥1-1.5 billion

Measure 3：Grow the subsidiaries’ businesses ¥0.5 billion

Measure 4：Expand contract of AEON Group ¥0.5 billion

▲¥2 billion

1-4 Total: Increase in gross profit margin ¥3-4 billion

¥1-2 billion YoY Increase in operating income

YoY Increase in SG&A

Regard ＲＯＥ as an important indicator, and maintain １２％ level

Balance between Investment for Growth, Capital Efficiency and Shareholders’ return


131.8143.2

155.5

166.2

12.6% 12.5% 12.3% 12.0%

0.0%

3.0%

6.0%

9.0%

12.0%

15.0%

0.0

50.0

100.0

150.0

200.0

250.0

2011年度 2012年度 2013年度 2014年度 2015年度E

EPS ROE％

(EPS yen) (ROE ％)

26

Forecast

■ ROE：Emphasize the ROE as a management discipline for shareholders, with aiming point of 12% level

Dividend ratio：Place the most importance on stable dividend, maintain 30% level of payout ratio for recent five years ■

FY2/12 FY2/13 FY2/14 FY2/15 FY2/16 E

8 9 15 17.5 22

27 34

40 46 48 50

5

52

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

0

10

20

30

40

50

60

2004年度 2005年度 2006年度 2007年度 2008年度 2009年度 2010年度 2011年度 2012年度 2013年度 2014年度 2015年度

配当金記念配当配当予想配当性向

FY2/05 FY2/06 FY2/07 FY2/08 FY2/09 FY2/10 FY2/11 FY2/12 FY2/13 FY2/14 FY2/15 FY2/16

Payout ratio

FY2/04 FY2/05 FY2/06 FY2/07 FY2/08 FY2/09 FY2/10 FY2/11 FY2/12 FY2/13 FY2/14 FY2/15

Dividend ¥8.0 ¥9.0 ¥15.0 ¥17.5 ¥22.0 ¥27.0 ¥39.0 ¥40.0 ¥46.0 ¥48.0 ¥50.0 ¥52.0

Payout

ratio 38.4％ 28.0％ 19.8％ 15.9％ 17.9％ 19.6％ 27.4％ 30.3％ 32.1％ 30.9％ 30.1％ 29.1％

Aim for eleven consecutive years of increased dividends since FY2/05

©2015 Aeon Delight All Rights Reserved 27

Shareholder Return

Dividend Commemorative

dividend

Dividend

forecast

*On December 1, 2007, the company conducted a two-for-one stock split. The dividend amount assumes that the stock split was conducted at the

beginning of FY2/05.

*A commemorative dividend of 5.00 yen is included in the year-end dividend for FY2/11.

■ These materials contain statements about forecasts and estimates relating to the future plans, strategies, and

performance of AEON DELIGHT.

◇ These statements are based not only on past performance, but also on assumptions based on information currently

available to the company.

For this reason, please note that the actual performance may differ from our estimates.

■ The information contained in these materials has been prepared by the following methods if not specifically stated

otherwise.

◇ All statements are based on consolidated results

◇ All figures of less than 100 million yen have been rounded down

◇ Percentages have been rounded off to one decimal place

If you have any questions or comments, please contact us below.

This presentation has been prepared based on the information available as of the date of the presentation (July 8, 2015). The

business forecasts may be revised due to various factors that may arise in the future.

IR Contact Yoshiaki Kyomoto

Group Strategy Div.

TEL ０４３-３５１-２５６３

Or visit our website at:

ｈｔｔｐ：//ｗｗｗ．ａｅｏｎｄｅｌｉｇｈｔ．ｃｏ．ｊｐ

AEON DELIGHT CO., LTD.

(Stock code: 9787)


Supplementary Information on the Financial …...FY2/16 1Q Financial Highlights 2 Sales and earnings...

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